Households Relying On Buy Now Pay Later And High Interest Credit To Meet Back To School And Work Costs

Households relying on Buy Now Pay Later and high interest credit to meet back to school and work costs

The cost of returning to school and work put pressure on households this year, with 70% of those who faced these expenses reporting negative impacts, according to a BNZ survey.

The survey found that of the 48% of respondents who faced start-of-year expenses in 2025, nearly one in three (29%) reported feeling pressure when deciding what to pay, how to pay, and when to pay. To manage, 37% turned to Buy Now Pay Later (BNPL) services, credit cards, and other high interest lending.

"The financial pressure at the start of the year is very real for some households, especially after the holiday period when budgets are already stretched," says Anna Flower, Executive for Personal and Business Banking at BNZ.

"For some, these pressures led to difficult sacrifices – 14% of affected households reported selling things to help meet these costs,” she says.

The biggest start-of-year expenses were stationery (53%), followed by transport (42%), school and work uniforms (42%), and technology-related costs (40%).

Budget service sees impact on families and seniors

"The findings from the BNZ survey mirror what we're seeing on the frontlines," says Claudette Wilson, General Manager of North Harbour Budgeting Services (NHBS).

"2025 has been challenging for parents, with many turning to Buy Now Pay Later schemes and other high-interest credit options that can create longer-term financial strain.

“Perhaps most concerning is seeing children excluded from essential school activities because their parents simply can't afford them," Wilson adds.

"We're witnessing families forced to choose between paying rent, putting food on the table, or covering basic school costs like technology, books and camp fees. With the ongoing cost of living pressures, some families simply can't stretch their budgets to cover all these necessities.

"We've also identified a concerning trend that's often overlooked - a significant increase in seniors over 65 seeking our support because they're raising grandchildren. These older New Zealanders, who should be enjoying retirement, are instead navigating school uniform purchases and technology requirements, creating substantial financial pressure on fixed incomes."

Wilson encourages those feeling financial pressure to reach out for support. "NHBS offers free, confidential financial guidance to anyone struggling with these costs. Our team can help with personalised budgeting solutions, negotiate with creditors if needed, and provide ongoing support as circumstances change."

Planning ahead can ease financial pressure

While the costs can be a significant burden, the survey shows many households are finding ways to manage. Of those with start-of-year expenses, 57% took proactive steps, including 48% saving in advance and 17% spreading payments over time.

Flower says saving even a small sum each month can make a big difference when new year costs roll around.

"Putting aside a little each month can ease the financial pressure when these costs come around. Even better, using a dedicated high interest savings account can help these funds grow with interest throughout the year, giving families a bit extra when costs arrive."

Practical tips for managing start-of-year costs

• Plan ahead - If possible, set aside a small amount each month and use high-interest savings accounts to help grow your money
• Use budgeting tools - use digital budgeting tools to track and categorise back-to-school or work costs to avoid overspending
• Explore your options - Check with schools about payment plans, second-hand uniform programmes or community exchanges
• Research tech choices - Ask if there are any special deals available through your child’s school, or consider quality refurbished technology to keep costs down

Source: BNZ Voice customer panel survey, 18th February – 2nd March 2025. Total responses: n=300 respondents. The profile of participating customers was not controlled for this survey.

© Scoop Media